Merits of balanced growth
- Economies of scale can be generated both internal and external, over and above increasing national output.
- Specialization is encouraged and this increases labour productivity and acquisition of the required skills.
- Diversification. A variety of economic activities from different sectors of the economy is stimulated.
- Employment. The increased rate of investment stimulates employment opportunities for the available labour force.
- Increased tax revenue. The balanced growth strategy widens the country's tax base, whose revenue can be injected into the economy to boost more production.
- It leads to a fair B.O.P position of the country as it tends to encourage foreign capital inflow from exports and reduced foreign capital outflow on imports.
- Market expansion. A balanced growth among sectors e.g Agriculture provides raw materials to the industrial sector, while industry provides the necessary inputs for the agricultural sector.
- The balanced growth strategy reduces dependency and promotes self-reliance because investment in various sectors in the country encourages the efficient operations of inward looking development programmes like import substitution.
- Increased incomes among the workforce is likely, as well as the demand for goods and services from the various productions sectors of the economy.
- Forward and backward linkages in production are encouraged through intersectoral linkages.